This diversity action was initiated by Plaintiffs Eye Laser, Nevyas Eye Associates and individual doctors--Herbert Nevyas, Michael Mazaheri, Stephen Weinstock, Norman Rappaport, and Warren Cross against MDTV and MDTV's Chief Executive Officer, Argen (collectively "Plaintiffs").*fn1 Plaintiffs purchased commercial advertising and marketing programs from MDTV. Plaintiffs allege MDTV and Argen misrepresented their services, overcharged Plaintiffs, did not produce their television programs with adequate production capabilities, did not run their television programs at the appropriate times, did not honor the exclusivity provisions, and refused to refund their money.

MDTV and Argen answered and asserted the following counterclaims against Eye Laser*fn2 (1) breach of duties of confidentiality and loyalty; (2) tortious interference with contractual relations and with prospective economic advantage; (3) breach of contract; (4) breach of duty of good faith and fair dealing; (5) conversion; and (6) defamation.

MDTV and Argen make no specific allegations against, or attribute specific conduct to, Eye Laser as a separate entity. Their claims instead appear to be based on conduct or statements attributed to Eye Laser's owner, Dr. Lee T. Nordan ("Nordan"), and Eye Laser's attorney Richard Sax ("Sax"). Specifically, the Counterclaimants allege "Sax, a business partner in Dr. Nordan's practice, who was involved in negotiating the terms of Dr. Nordan's contract with MDTV, contacted . . . Argen . . ., and threatened . . . Argen with a baseless Class Action law suit if MDTV did not pay Sax over $100,000.00 as compensation for alleged losses in his business with Dr. Nordan resulting from contracted advertising that allegedly did not produce satisfactory results." (Defendants' Answer and Counterclaim ¶ 57). The Counterclaimants further allege Dr. Weinstock "colluded" with Plaintiffs in this action, including Dr. Nordan "and/or shared trade secrets belonging to MDTV with each other, individually or jointly, informing each of the actual costs associated with MDTV's business plans and operations, including costs of purchasing cable television time, the sources thereof, and costs associated with producing advertising associated with contracts belonging to MDTV." (Id. ¶ 59).

STANDARD OF REVIEW/BURDEN OF PROOF ON SUMMARY JUDGMENT

As noted, Eye Laser is moving for summary judgment on counterclaims asserted against it by MDTV and Argen--claims which MDTV and Argen would have the burden of proof at trial. Thus, Eye Laser "is not required to produce evidence showing the absence of a genuine issue of material fact with respect to" the asserted counterclaims. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (citation omitted). Nor is Eye Laser required to "support [its] motion with affidavits or other similar materials negating" the counterclaims. Id. at 1543. Rather, Eye Laser "need[s] only point to shortfalls in the [Counterclaimants'] case to demonstrate the absence of evidence" supporting their counterclaims. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1543 (9th Cir. 1989) (alterations not in original).*fn3 Eye Laser may do this by simply pointing to the pleadings and arguing that Counterclaimants have failed to establish an element essential to their case. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

To defeat summary judgment, MDTV and Argen "must respond with more than mere hearsay and legal conclusions."Orr v. Bank of America, NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (citation omitted). MDTV and Argen also "must do more than simply show that there is some metaphysical doubt as to the material facts*fn4 ." Id. (citation omitted); see also Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). Rather, MDTV and Argen must come forward with sufficient evidence demonstrating to the Court that there are genuine issues of material fact to be decided at trial. Fed. R. Civ. P. 56(e). To do so, MDTV and Argen "may not rely merely on the unsupported or conclusory allegations of [its] pleadings." Coverdell v. Department of Social and Health Services, State of Wash., 834 F.2d 758, 769 (9th Cir. 1987) (citations omitted); see also Celotex Corp., 477 U.S. at 324. That is the Counterclaimants "may not rest upon the mere allegations or denials of [their] pleadings", but must respond "by affidavits or . . . must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324. Put differently, the Counterclaimants must "present affirmative evidence from which a jury might return a verdict in [their] favor." Phelps Dodge Corp., 865 F.2d at 1542 (citation and internal quotation omitted). And, "a complete failure of proof concerning an essential element of [their] case necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 323.

DISCUSSION

Eye Laser has challenged the veracity of the counterclaims asserted against it, and MDTV and Argen have neither submitted evidence nor otherwise controverted Eye Laser's supporting evidence to present a jury question. For example, Eye Laser argues the counterclaims are barred under California*fn5 's litigation privilege doctrine*fn6 to the extent they are premised on communications or conduct in furtherance of filing the complaint in this case against MDTV and Argen. The Court agrees.

"For well over a century, communications with 'some relation' to judicial proceedings have been absolutely immune from tort liability by the privilege codified as section 47(b)." Kimes v. Stone, 84 F.3d 1121, 1126 (9th Cir. 1996 ) (citation omitted). "[T]he privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action." Id. at 1127.

"The California courts have applied the privilege quite expansively." Rodriguez v. Panayiotou, 314 F.3d 979, 988 (9th Cir. 2002) (citation omitted); see also Sacramento Brewing Co. v. Desmond, Miller & Desmond,75 Cal. App. 4th 1082 1089 (1999) (The litigation privilege "should be denied only where [the communication] is so palpably irrelevant to the subject matter of the action that no reasonable person can doubt its irrelevancy." ). "Although originally enacted with reference to defamation, the privilege is now held applicable to any communication, whether or not it amounts to a publication, and all torts except malicious prosecution." Stone, 84 F.3d at 1127 (citation omitted). That is the only tort cause of action which can be based upon the initiation of a lawsuit (or communicative acts related to the lawsuit) is that of malicious prosecution." Ludwig v. Superior Court, 37 Cal. App. 4th 8, 24 (1995). "The privilege protects attorneys, judges, jurors, witnesses, ...

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